Mary Beth Franklin discusses two of the most-common misconceptions held by financial advisers when it comes to Social Security claiming for married couples looking to maximize their retirement income.

Video Transcript

I think the biggest misconception among financial advisers is to
how implement the claiming strategies for married couples to maximize
their social security benefits over their lifetime. The 2 main
strategies are to file and suspend and to restrict a
claim to spousal benefits only. The first one, file and
suspend, means if you wait until you're full retirement age
of 66, you can state to the social security administration,
I want to file and suspend for the purpose of
triggering spousal benefits for my wife, for my husband. And
I want to suspend my own so they keep growing
by 8% year up until age 70 then you switch
to your own enhanced benefit. Now, in a different situation
where one spouse is already collecting, you might wanna say,
at 66, I want to restrict my claim to spousal
benefits only. That means give me half of what my
spouse is getting, but don't give me my own. Let
that keep growing by 8% a year up until age
70. So, the most common question I get from financial
advisers is, can a married couple where they're both 66,
can they both file and suspend or can they both
file a restricted claim for spousal benefits only? The short
answer is no and let me explain why. It's a
bit like watching a couple walk down the New Jersey
boardwalk with I'm with stupid t-shirts on putting to each
other. They just cancel each other out. See, if you
file and suspend, you're saying, I'm filing to trigger my
spouse's benefits. So, if both of you did that, which
social security wouldn't let you, it basically means you'd both
say, I'm going to file, but neither of us want
benefits. Now, that's not smart. Separately, if you said, I
want to restrict my claim to spousal benefits only, if
you both did that, nobody's claimed a benefit, so there's
no benefit to restrict to. It just doesn't work. But
there is a combo strategy for couples where they each
have an earnings history where they can work. What would
happen with a combo strategy, if both spouses are at
least 66 years old, is one would file and suspend
to trigger benefit for the spouse. That first spouse will
get nothing for 4 years. The second spouse would say,
I want to restrict my claim to spousal benefits only.
That second spouse will get half of the first spouse's
benefits. And then when they each turn 70, they return
on their own benefits, which would each now be worth
132% of what it would have been at 66. That's
real money.